Why and when do you need a DAO

Use DAO

If you want to formalise interactions between different actors in code instead of using written contracts:"We will pay you $100 for this task. If we don't agree, then you should go to court" -> "We put $100 in the escrow, and we have a Dispute Resolution mechanism in case something goes wrong"

If you want to add incentives/penalties to balance the process and eliminate asymmetry:
"If you don't attend the meeting, you should feel sorry" -> "If you don't attend the meeting, then your stake is burned"

If you need to effectively govern some resource collectively;

If you want to process/work with crypto and tokens directly;

If you need to add transparrency. As a result, one can verify that protocol is applied correctly (finances, votings, decisions, etc);

If you need to protect actors from the centralised management;

If you need to reduce possibility of censorship.

As a result

DAOs lead to better decision making: easier, done faster and more verifiable;